If you think the ObamaCare exchanges and premiums were bad …

posted at 12:01 pm on October 14, 2013 by Ed Morrissey

… then Barack Obama’s hometown newspaper has news for you. The initial shock of the premium increases and the incompetent use of $94 million [see update] to create the world’s biggest 404 exchange are just the starting shocks of ObamaCare. Wait until people have to actually start using their new insurance, and perhaps the biggest surprise of all will be waiting:

Adam Weldzius, a nurse practitioner, considers himself better informed than most when it comes to the inner workings of health insurance. But even he wasn’t prepared for the pocketbook hit he’ll face next year under President Barack Obama’s health care overhaul.

If the 33-year-old single father wants the same level of coverage next year as what he has now with the same insurer and the same network of doctors and hospitals, his monthly premium of $233 will more than double. If he wants to keep his monthly payments in check, the Carpentersville resident is looking at an annual deductible for himself and his 7-year-old daughter of $12,700, a more than threefold increase from $3,500 today.

“I believe everybody should be able to have health insurance, but at the same time, I’m being penalized. And for what?” said Weldzius, who is not offered insurance through his employer. “For someone who’s always had insurance, who’s always taken care of myself, now I have to change my plan?”

That’s right — not only have premiums doubled in the individual markets, the coverage has gotten worse in a very concrete way. The new system has now opened a wide chasm between the employer and individual markets on actual cost coverage, too:

To promote the Oct. 1 debut of the exchanges, the online marketplaces where consumers can shop and buy insurance,Obama administration and Illinois officials touted the lower-than-expected monthly premiums that would make insurance more affordable for millions of Americans. But a Tribune analysis shows that 21 of the 22 lowest-priced plansoffered on the Illinois health insurance exchange for Cook Countyhave annual deductibles of more than $4,000 for an individual and $8,000 for family coverage.

Those deductibles, which represent the out-of-pocket money consumers must spend on health care before most insurance benefits kick in, are higher than what many consumers expected or may be able to stomach, benefit experts said.

By comparison, people who buy health insurance through their employer have an average individual deductible of just more than $1,100, according to the Kaiser Family Foundation.

Bear in mind that Democrats claimed that the ObamaCare exchanges would make insurers treat individuals better in relation to group insurance plans. Instead, they’ve made the markets for individuals even worse than before, thanks to the deluge of costly mandates imposed on insurers, who must pass the cost of risk pools to the consumers.

The higher deductibles are the result of attempting to tamp down the premium hikes, but this raises a big question about the structure of the reform itself. If consumers end up with $4000 deductibles, how are these costs different than the alternate reform model of hospitalization insurance, health-savings accounts (HSAs), and emphasis on the cash/retail system for routine medical care? What we’ve ended up with is the same deductible costs — no one will use $4000 in routine medical care a year — without the cash-market reforms that would drive costs downward through price-signal clarity and competition, while incentivizing providers to get back into routine medical care by wiping out third-party payer red tape and costs.

Millions of Americans may be wrestling with computer glitches to try to sign up for Obamacare — but many people eligible just won’t bother and will pay a price for it.

Some will flout the mandate to buy coverage on ideological grounds, a health insurance version of civil disobedience.

Some will opt for the penalty because it’s cheaper than paying for insurance, even with subsidies — as long as they don’t get sick and have to pay their own medical bills.

And some are so confused about the president’s health care law that they may not even realize they have to pay a penalty — or a tax, as the Supreme Court called it — until they get slapped with the fine when they file their 2014 tax returns. And sign-up rates may be affected, too, if the technical problems on the exchange websites persist.

If you have to pay the first $4000 out of your own pocket on insurance premiums that have doubled, why bother at all?

Blowback

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I’ve been on an HSA through my husband’s work for a few years and I absolutely hate it. Right now, our decutible is $4,500. His company will offer this HSA next year. However, we’re not sure what our monthly premium or deductible will be. This being said, Obamacare is nothing more than an HSA plan on steroids.

What makes me mad is that no one is talking about people who basically live pay check to pay check and don’t have any extra funds to cover the double and triple increases. Like this idiot who wanted this healthcare, he’s looking at a $9200 deductible, can he afford that? I know I couldn’t and most likely, he can’t either.

You are both talking about two different things and they play in different areas.

End of life expenses are significant – and the last 12 months tends to be more expensive for each of us, unless we are lucky enough to go right away – hopefully in our sleep.

The 0-5% of the population driving a significant amount of the actual plan expenses is tracked pretty closely by employer group plans – and it typically is in the neighborhood of half of all claim dollars paid.

After this whole Obamacare thing kicks in will it be OK for me to start shouting at fat people, smokers, fast food eaters and such?
“Lose some weight!! Put out that cigarette!! Drop that chicken leg!! You’re raising my premiums!!”

End of life expenses are significant – and the last 12 months tends to be more expensive for each of us, unless we are lucky enough to go right away – hopefully in our sleep.
Zomcon JEM on October 14, 2013 at 3:12 PM

I’ve always said I wanted to die in my sleep like granddad did and not yelling and screaming the rest of the family in the car with him.

Some will opt for the penalty because it’s cheaper than paying for insurance, even with subsidies — as long as they don’t get sick and have to pay their own medical bills.

I have type 1 diabetes, pay my own medical bills, and the penalty is still cheaper. I’m sure the costs will go up to encourage me to find room in my budget for the required tribute, but it’s wringing blood from a turnip at this point. I can imagine, for instance, the federal government deciding that it should be illegal for diabetics to manage their own care, to require prescriptions for (or eliminate altogether) basic insulin therapy, and then treat it like birth control pills as leverage for an assortment of other screenings that would be quite costly without the government-approved health subscription.

But hey, it’s the intentions that count, right? And to ice the cake, I have to listen to people going on about how they’re helping me. Well I’d like to help them the same way.

I do not disagree with you. I just said a large proportion of the 5% group are multi year users that remain in the 5% for long periods of time.

There are couple big reasons.

1. 3rd party payer shields them from the costs
2. They are often not the one’s making the decisions.

WryTrvllr on October 14, 2013 at 1:27 PM

You do know it. Because they do not face the costs. That is why.

As for not making one’s own decisions, it is called a living will. You fill it out and you specify what kinds of care you authorize to be done to you if you are incapacitated. That is called being a responsible person, and if it were people talking about their own resources, do I get pointless end of life treatment, die suffering and stiff my children of any inheritance, or do I forgo the worthless end of life treatment, die in dignity and leave something behind for charity or my children? I tend to think if it were their own earnings, most would chose to die dignified leaving something behind other than hospital bills.

Interesting-an insurance plan that really doesn’t insure anyone, police who don’t protect anyone from crime, a Treasury that’s bankrupt, a military being indoctrinated to fight their own citizens, various social welfare departments that maintain poverty for decades, a press that doesn’t question anything concerning the government, a President that really does lie every time he opens his mouth, an opposition party that’s really in bed with the other party, a department of defense that equips a terrorist organization that has killed thousands of Americans, and a Department of Homeland Security that doesn’t protect us from terrorism.

I don’t really disagree with anything you have said. I only wish to caution you on the 5% use 50% of the resources thing. That is true at the younger age groups, but as the article you yourself stated, as people age, chronic illness becomes much more prevalent.

In essence, if we are lucky, we all get to become the 5% someday.

If the 5% die earlier, they are not necessarily costing the system anymore than if they died of a chronic illness at the age of 75.

I totally understand the concept of Living wills. They save a lot of money that wouldn’t necessarily do anything to improve quality of life. But the truth remains that it is the elderly who are the prime consumer of health care in the world.

That statistic about the cost of caring for people has been used to do all sorts of bad things. Whether you like smoking or not, if was the disingenuous argument liberals advanced to sue the tobacco companies. It has been used to ban Bungee jumping in Florida. Motorcycle helmets. Seat Belt laws. The list goes on and on. It is not the Government’s job to protect me from myself, but a liberal will tell you that since they have to pick up the tab…….

And I merely wish to point out that that argument is total rubbish.

Which is why the cost of medical care in this country has dropped so much since the rate of smoking has dropped / \ (whatever)

Interestingly, you pointed out the one area that they haven’t applied it. I am hoping for some poetic justice.

For three years, I have been telling minions of the god-king Obama that you are not getting “free” medical care; it is a requirement to buy insurance. And not any insurance, only certain types of insurance.

I’ve been on an HSA through my husband’s work for a few years and I absolutely hate it. Right now, our decutible is $4,500. His company will offer this HSA next year. However, we’re not sure what our monthly premium or deductible will be. This being said, Obamacare is nothing more than an HSA plan on steroids.

moonsbreath on October 14, 2013 at 3:05 PM

Not to give you a hard time; but the money you put into a HSA; don’t you get to carry it over from one year to the next?

That’s a heck of a lot better than Obamacare. In Obamacare, there is no carryover.

Secretary Sebelius and her ilk have designed 1980′s health insurance plans.

You don’t need the exchanges if you are not getting a subsidy, you can use them, but the point of them is to include a subsidy in the price, and if you are middle class, a.k.a don’t qualify for Pell Grants, college financial aid, and other benefits, there is a good chance you don’t need the exchanges at all, and are not required to shop there.

Call up the insurance company that you want and avoid the healthcare.gov.

If you need to estimate there is a subsidy calculator you can find searching the internet at the Kaiser Family Foundation, there you can play with income numbers and even see what your family in other states might be obligated for or which states you might like to move to.

The thing I notice is that in states where the insurance is more expensive, the people get bigger subsidies. I am not sure if this is fair, maybe there should be a per person limit on subsidies.